Senior officials at some SACCOs have borrowed heavily from member funds and defaulted, exposing serious governance failures and weak credit controls.
The problem is not new.
Under the Sacco Societies Act, SACCOs may lend to board members and staff but must treat them as ordinary members and bar them from participating in their own loan approvals. SASRA requires SACCOs to report insider loans within 14 days of approval, followed by monthly updates.
Despite these safeguards, the pattern persists. Regulators are now under growing pressure to close the loopholes that allow insiders to benefit at the expense of ordinary members.
